WASHINGTON, Aug. 1, 2013 /PRNewswire-USNewswire/ -- The College of American Pathologists (CAP) expressed strong support for legislation introduced today by Rep. Jackie Speier (D-CA), that would put an end to physician self-referral of anatomic pathology and other designated health services under the Stark law.

"The College has been sounding the alarm on the wasteful incentives current policies on self-referral present to physicians. We applaud Representative Speier for putting patients first and preventing powerful interest groups from exploiting a loophole in the law that wastes billions of Medicare dollars and adds no patient benefit," said CAP President-Elect, Gene Herbek, MD.

The legislation would amend the Stark Law's In-Office Ancillary Services (IOAS) exception by removing anatomic pathology, physical therapy, advanced diagnostic imaging, and radiation oncology from the list of services that may be self-referred under the current exception. It would not change the status of clinical pathology or other services covered by the IOAS exception. In doing so, it returns the exception to its original intent, which is to allow physicians to self-refer simple laboratory tests, such as blood glucose, urinalyses and strep tests that can be done during the patient's office visit to inform diagnosis and treatment. Complex testing for biopsies to diagnose cancer and other diseases or conditions do not fall into this category. Also, the bill does not impact truly integrated, coordinated care models such as ACOs or rural health care providers.

The GAO Report examined Medicare claims from 2004 to 2010, and found:

Self-referrals for anatomic pathology services during that period increased at a far faster rate than non-self-referrals, more than double, compared to a 38 percent increase by non-self-referring physicians over the same period.

In 2004, self-referred anatomic pathology services made up 15.9 percent of all such services, and increased to 22.5 percent in 2010. During this period, Medicare expenditures for self-referred services increased about 164 percent, whereas expenditures for non-self-referred services increased about 57 percent.

In 2010, three provider specialties—dermatology, gastroenterology and urology—accounted for over 90 percent of self-referred anatomic pathology services. GAO estimates that in 2010, self-referring providers likely referred over 918,000 more anatomic pathology services than would have been referred by providers who were not self-referrers.

In 2010, Medicare spent an estimated $69 million more than it would have spent if self-referring providers had performed tissue biopsy procedures at the same rate as non-self-referring providers, and according to GAO this estimate probably understates the level of additional Medicare spending because its analysis was limited to anatomic pathology services referred only by dermatologists, gastroenterologists and urologists.

CAP has in the past supported research to help quantify over utilization by self-referring physicians and their impact on Medicare spending. The research was conducted by well known health policy economist, Jean Mitchell, PhD, and published in the leading peer-reviewed health policy journal, Health Affairs. It compared Medicare billing practices for anatomic pathology services related to prostate biopsies by self-referring and non self-referring urologists, and using Medicare's own data showed that self-referring urologists billed Medicare for 72% more prostate biopsy specimens compared to non self-referring physicians, but had a 40% lower cancer detection rate than those who did not self refer. The GAO report corroborates Dr. Mitchell's findings.

"The CAP believes the only way to solve the problem is by removing anatomic pathology services from the Stark Law IOAS exception," Herbek said. "Now that we have clear data documenting the problem and bill that would prevent it, Congress must act quickly to pass it and close this loophole once and for all."

For more information on CAP's position on physician self-referral of anatomic pathology services, visit our Self-Referral Resource Center at www.cap.org/advocacy.

About the College of American Pathologists

As the leading organization for board-certified pathologists, the College of American Pathologists (CAP) serves patients, pathologists, and the public by fostering and advocating excellence in the practice of pathology and laboratory medicine worldwide. With more than 18,000 physician members, the CAP has led laboratory accreditation for more than 50 years with nearly 7,500 CAP-accredited laboratories in 50 countries. Find more information about the CAP at cap.org.